Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q3 2019 Earnings Presentation
17 slides from Leidos's earnings presentation, Oct 29, 2019
Slide 1: Leidos 3Q 2019 Earnings Conference Call
Leidos 3Q 2019 Earnings Conference Call October 29, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this release contain or are based on "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "
Slide 3: 3Q FY 2019 Highlights
3Q FY 2019 Highlights Generated record revenue of $2.84 billion Continued Year-over-year revenue growth of 10.1%; 12.0% organic growth(1) Revenue Growth Adjusted EBITDA margins of 10.7% Acceleration Grew backlog to a record $23.9 billion; 1.8x book-to-bill Generating Strong $349M cash flow
Slide 4: Leidos 3Q FY19 Results
Leidos 3Q FY 19 Results Revenue Non-GAAP Adjusted EBITDA Cash Flows from ($M) Diluted EPS Margin Operations ($) (%) ($M) $2,835 $2,575 +10.1% 10.8% 10.7% $371 $1.36 $349 $1.14 +19.3% -10bps -$22M 3Q FY18 3Q FY19 3Q 2018 3Q 2019 3Q 2018 3Q 2019 3Q 2018 3Q 2019 Note: See appendix for definition & reco
Slide 5: Defense Solutions Segment
Defense Solutions Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $1,354 $108 8.5% $106 8.0% $1,250 +8.3% +1.9% -50bps 3Q 2018 3Q 2019 3Q 2018 3Q 2019 3Q 2018 3Q 2019 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 5
Slide 6: Civil Segment
Civil Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $973 13.2% $881 +10.4% $116 7.8% $76 -540bps -34.5% 3Q 2018 3Q 2019 3Q 2018 3Q 2019 3Q 2018 3Q 2019 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 6
Slide 7: Health Segment
Health Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $508 $75 14.8% 14.2% $444 +14.4% +60bps $63 +19.0% 3Q 2018 3Q 2019 3Q 2018 3Q 2019 3Q 2018 3Q 2019 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 7
Slide 8: Backlog & Book-to-Bill
Backlog & Book-to-Bill 23.9 Backlog1 ($B) 20.3 20.8 21.5 21.7 14.4 15.4 15.4 18.3 14.2 6.1 6.4 6.1 6.3 5.6 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 1.8 Book-to-Bill2 1.8 1.2 1.3 1.1 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 Funded Backlog Negotiated Unfunded Backlog (1) Backlog presented at exchange rate in effe
Slide 9: 2019 Guidance
2019 Guidance Current Prior Revenue $10.9B - $11.0B $10.65B - $10.95B Adjusted EBITDA Margin(1) 10.2% - 10.4% 9.9% - 10.1% Non-GAAP Diluted EPS(1,2) $4.90 - $5.10 $4.50 - $4.75 Operating Cash Flow Meet or exceed $875M(3) Meet or exceed $825M(3) (1) A quantitative reconciliation of adjusted EBITDA ma
Slide 10: Appendix
Appendix > leidos
Slide 11: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, such as non-GAAP operating income, non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP diluted earnings per share (EPS), adjusted earnings before interest, taxes, depreciation and amortization (E
Slide 12: Definition of Non-GAAP Financial Measures
Definition of Non-GAAP Financial Measures Non-GAAP operating income is computed by excluding the following items from net income: (i) non-operating expense, net; (ii) income tax expense, and (iii) the following discrete items: Integration and restructuring costs - Represents integration, lease ter
Slide 13: Organic Revenue Calculation
Organic Revenue Calculation 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 (dollars in millions) Defense Solutions Revenues, as reported $ 1,189 $ 1,262 $ 1,250 $ 1,265 $ 1,267 $ 1,346 $ 1,354 Civil Revenues, as reported $ 829 $ 816 $ 881 $ 885 $ 847 $ 881 $ 973 Commercial Cybersecurity Business (
Slide 14: Non-GAAP Operating Income Reconciliation
Non-GAAP Operating Income Reconciliation 1QFY18 2QFY18 3QFY18 4QFY18 FY18 1QFY19 2QFY19 3QFY19 (in millions) Operating income $ 159 $ 199 $ 203 $ 188 $ 749 $ 192 $ 210 $ 249 Integration and restructuring costs 17 8 7 5 37 2 1 - Amortization of acquired intangibles 50 51 50 50 201 42 43 43 Amortizati
Slide 15: Reportable Segments Non-GAAP Operating Income Reconciliation
Reportable Segments Non-GAAP Operating Income Reconciliation Quarter Ended September 27, 2019 (in millions) Operating income Integration and Amortization of Amortization of equity Non-GAAP operating (loss) restructuring costs acquired intangibles method investment income (loss) Defense Solutions $ 9
Slide 16: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 1QFY18 2QFY18 3QFY18 4QFY18 FY18 1QFY19 2QFY19 3QFY19 (in millions, except per share amounts) Non-GAAP operating income $ 236 $ 260 $ 262 $ 246 $ 1,004 $ 239 $ 256 $ 295 Depreciation expense 13 15 14 14 56 15 14 16 Other income (expense), net - 1 2 (4) (1)
Slide 17: Non-GAAP Financial Measures Reconciliation (cont'd)
Non-GAAP Financial Measures Reconciliation (cont’d) Quarter Ended Sptember 27, 2019 (in millions, except per share amounts) Amortization of acquired Amortization of equity As reported intangibles method investment Other tax adjustments Non-GAAP results Operating income $ 249 $ 43 $ 3 $ - $ 295 Non-o